Modi government Another big achievement has been added to his name. During the 10 years of Prime Minister Narendra Modi’s tenure, personal income and corporate tax collection is likely to increase to more than Rs 19 lakh crore. This will provide more opportunities for people to take favorable tax measures. Net direct tax collections increased from Rs 6.38 lakh crore in FY 2013-14 to Rs 16.61 lakh crore in FY 2022-23. Collections from net direct taxes (personal income tax and corporate tax) have increased by 20 percent so far in the current financial year 2023-24. If growth continues at this pace, the collection is likely to be around Rs 19 lakh crore in the financial year ending March 31, 2024. This is more than the estimated amount of Rs 18.23 lakh crore in the budget for financial year 2023-24.
Efforts to simplify the tax structure
The government has been trying to simplify the tax system for many years with lower rates and fewer exemptions. In 2019, the government offered a lower tax rate for corporate houses that left the exemption. A similar scheme was launched for the people in April 2020. The government will present the Vote on Account on February 1, 2024 as general elections are to be held in April-May. The new government formed after the elections is likely to present the full budget in July 2024. The Bharatiya Janata Party (BJP) government led by Prime Minister Narendra Modi came to power in 2014. Shardul Amarchand Mangaldas & Co partner (direct taxes) Gauri Puri said the digitization of tax transactions and the continued focus on formalizing the economy has led to an increased propensity to pay taxes. “This is expected to provide some opportunities for the government to rationalize tax rates,” Puri said. Certainty regarding tax treaty application will be important to ensure ease of doing business in India. In 2024, the government is expected to continue to streamline direct tax provisions to increase tax certainty.
Government will try to solve some issues
Deloitte India Partner (Direct Tax) Rohinton Sidhwa said that the full Budget will focus on the initiative to leverage the ‘China+1’ strategy to boost investment and innovation and the ongoing initiative to prepare for the World Bank ‘B-Ready Ranking’. There is a possibility of concentration. Meanwhile, INDUSLAW partner (indirect tax) Shashi Mathews said the high tax rate has stunted the “rapid growth” of the online gaming industry. “It can be expected that the government will reconsider some of these points,” he said. Some of these issues are pending before the courts and the decision of the courts can be expected to provide some relief. Overall, taking decisions on these issues in 2024 will be in favor of the stakeholders.
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